McColl’s, which is listed on the London Stock Exchange, hopes to buy it to shed around 16,000 employees, or around 6,000 on a full-time basis, and is in talks with Morrisons
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McColl’s has confirmed it has gone into administration, putting nearly all stores and 16,000 jobs at risk.
The convenience store chain has over 1,100 stores in England, Scotland and Wales.
McColl’s employs approximately 16,000 people, or approximately 6,000 full-time employees.
But the firm confirmed this afternoon that it had to file for bankruptcy “to preserve the future of the company and to protect the interests of employees”.
McColl’s is now hoping another company will buy it.
Earlier this morning it emerged Morrisons had lined up to save the chain as warned “increasing probability” of collapsing.
Morrisons already operates a number of McColl’s stores.
The bailout would include full repayment of lenders and protection of the vast majority of the retailer’s stores.
In a statement to the London Stock Exchange, McColl said: “In order to protect creditors, safeguard the future of the company and protect the interests of employees, the board regrettably had no choice but to place the company under administration and to appoint PriceWaterhouseCoopers as administrator with the expectation that they intend to implement a sale of the business to a third party purchaser as soon as practicable.”
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McColl’s is understood to have been in talks with potential lenders for several months to shore up the deal after it struggled during the crisis Pandemic due to supply chain issues, inflation and a heavy debt burden.
On Thursday, the company warned that if those talks are unsuccessful, “it becomes more likely that the group will be placed under administration as the likelihood increases.”
It was revealed this week that the group’s shares are to be suspended from the London Stock Exchange as bosses said they were unable to sign off their accounts on time by auditors.
The company’s shares were already falling when it reported last month that talks with its lenders and banks would likely leave shareholders empty-handed in a rescue effort.
EG Group, the gas station giant controlled by Asda owners Mohsin and Zuber Issa and private equity firm TDR Capital were also said to have been in talks to make an offer earlier this year.
In November, McColl’s announced it would increase Morrisons Daily conversions from 350 to 450 in a year.
The company raised £30million from shareholders in a cash call just seven months ago.
Jonathan Miller, McColl’s chief executive, said in December that the fiscal year was “undoubtedly a tough year for the company, ending with widespread and ongoing supply chain challenges.”
The retailer was already struggling before the pandemic.
“While we were able to partially mitigate these external factors, they still had a significant impact on underlying trading,” he added.
Miller is said to have personally invested £3million in fundraising to save the company last summer.
https://www.mirror.co.uk/money/breaking-mccolls-crashes-administration-putting-26892871 McColl's collapses into administration, putting 1,100 stores and 16,000 jobs at risk